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Bill could send money from airport to region

By Steve Harrison and Ely Portillo
sharrison@charlotteobserver.com

The N.C. House bill to create an airport authority would allow money from Charlotte Douglas International Airport to be spent on airports in neighboring counties.

The bill would allow for airport revenue – much of which is paid by US Airways – to be used to “expand, maintain or operate” airports in Iredell, Gaston, Lincoln, Cabarrus and Union counties, so long as the local governing bodies accepted the money.

“That boggles my mind,” said Republican City Council member Warren Cooksey, who opposes the airport legislation.

Supporters of a bill to create an airport authority have argued Charlotte Douglas must be kept free from City Council interference, including the possibility that council members could use airport revenue for other projects, such as a streetcar.

But Cooksey said the City Council has never taken “even preliminary action on using airport revenue for anything other than the airport.”

“Now there has been action by two committees in the N.C. House where (Charlotte Douglas) revenue could be used off-site in other counties,” Cooksey said.

Former Charlotte City Council member Stan Campbell, one of the leading local supporters of an airport authority, said that the bill only provides a mechanism for a Charlotte Airport Authority to assume responsibility for neighboring airports – if other counties decide they don’t want to run their airports anymore.

“It’s not a backdoor,” he said. “Money cannot arbitrarily be taken from this airport and be spent anywhere but this airport.

“However, if the county commissions of those various counties decided they did not want to manage their airports anymore, they could ask this authority board to take it over,” he said. “The mechanism doesn’t get triggered any other way.”

Campbell said he is not concerned that revenue from Charlotte Douglas would be diverted to the surrounding counties.

Potential windfall

For the region’s smaller airports, joining a newly created airport authority could be a major financial boon: Charlotte Douglas had cash reserves of more than $678 million at the end of fiscal 2012, according to the city’s annual financial report.

Charlotte Douglas now charges some of the lowest fees of any large airport – a factor that US Airways has said has been crucial for growing its Charlotte hub.

US Airways declined to comment Wednesday. The company talked with authority supporters last year but has said it ultimately declined to join the effort to establish an authority.

The Federal Aviation Administration prohibits airport revenue from being used for non-airport purposes. That means the City Council can’t use Charlotte Douglas revenue to fix potholes on Park Road, for instance.

But the FAA apparently allows for flexibility on how airport authority funds are used between airports, so long as they are managed by the same authority. If an airport authority manages multiple airports, the agency “has no requirement for airport authorities to maintain separate accounts for each airport,” according to FAA spokesperson Kathleen Bergen.

Many airport authorities operate multiple airports. The Port Authority of New York/New Jersey operates Newark, LaGuardia and John F. Kennedy airports, for example.

Under the bill being considered, neighboring counties could have significant sway over Charlotte Douglas finances if an authority is created.

The new authority would have 11 members. Charlotte’s mayor and the City Council would each have two appointments. Mecklenburg and the five surrounding counties – Cabarrus, Gaston, Iredell, Lincoln and Union – would each have an appointment.

Charlotte Douglas Aviation Director Jerry Orr has spoken in favor of an authority, saying it’s the best way to ensure the airport continues to operate efficiently. When asked by the Observer on Wednesday whether he was in favor of an authority being able to spend Charlotte Douglas money on other airports, an airport spokesperson said Orr had no comment.

Provision added in House

The provision about allowing the authority to spend Charlotte Douglas money on other airports wasn’t included in the original authority legislation passed by the N.C. Senate in March.

It was included in a June 4 version of a House authority bill, but momentum to move that bill forward had seemingly stalled.

But the bill was revived again this week. The city of Charlotte declined to participate in a proposed airport study group of legislators and city officials. Mayor Patsy Kinsey and City Manager Ron Carlee said the study group would be weighted against the city and predisposed to creating an airport authority.

In response, the GOP-controlled House resurrected the airport bill, which had seemed dead. The bill passed the House Finance Committee on Wednesday and could be passed by the full House Thursday.

Counties initially worried

When the airport authority bill was first considered earlier this year, politicians in neighboring counties were concerned about the fate of their own airports, and whether the state could transfer them to authorities.

Concord City Manager Brian Hiatt said he is still concerned about how the bill would affect Concord Regional Airport.

“We’re concerned about Concord Regional Airport, in terms of the state in any way taking it over – even if there is money coming from Charlotte,” Hiatt said.

He added that money spent to improve Concord Regional could hurt Charlotte Douglas.

“We would also be concerned about that money usurping services at Charlotte; that’s obviously the airport we all use,” Hiatt said.

The airport’s revenue comes mostly from landing fees, concession sales, leases in the terminal and parking.

In the fight over the airport, some local business leaders have said the airport must be protected from city meddling.

They have cited a city report that suggested that a streetcar could be funded by taxing airport parking spaces. The city later said that report was wrong and that FAA regulations would have prohibited the proposal.

Another point of contention was a City Council decision in late 2012 to transfer airport security from Charlotte Douglas to the Charlotte-Mecklenburg Police Department. That move doubled airport security costs, which are mostly paid by the airlines.

The City Council has said it will study issues such as the higher security costs.

Harrison: 704-358-5160
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